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ACTION
Definition An action gap can be defined as failure by a company to take the appropiate steps in order to fructify its innovation efforts. A company facing an action gap will be unable of making successful and strategic innovative moves, wherefore losing its opportunity to gain competitive advantage and solidify its hold on the market. Characteristics: ''' *An inefficient innovation process that is neither repeatable nor reliable *Innovation attempts lose the momentum required to go through all the development stages *A lack of innovative initiative throughout the company's structure and culture Diagnostic To determine whether or not a company is facing an action gap, a series of questions can be asked: Is innovation on your corporate agenda? Have you assigned resources to systematically explore innovation opportunities? How effective has the innovation team been? Do the initiatives deliver results to the most pressing challenges your organization is facing? Case examples '''J.C. Penney (Ron Johnson Case) Due to his success at Apple and Target, Johnson was hired by J. C. Penney in November 2011, when Johnson announced his transformation vision in late January 2012, J. C. Penney’s stock rose 24 percent to $43. He put all the resources of the company in an ambitious strategy for reinvent the J.C. Penney stores. Ron removed low prices and coupons from the store with the intention of attracting a new consumer market whose purpose was to buy quality clothes at decent prices all year. He designed an integrated campaign to communicate these changes to their consumers, all staff was trained to communicate this proposal and all their communication channels was used to communicate the campaign. Johnson's execution, however, was described "one of the most aggressively unsuccessful tenures in retail history". Nevertheless, Johnson defended his strategy saying that "testing would have been impossible because the company needed quick results and that if he hadn’t taken a strong stance against discounting, he would not have been able to get new, stylish brands on board. CNN's Christine Romans examines how missteps by former JCPenney CEO Ron Johnson cost him his job The Ritz-Carlton Case With the goal to position itself as a world-class hotel and service excellence at the world. The Ritz-Carlton hotel made a strategic plan to redesign their service experience. The strategic quality management plan begins with the president and the other 13 senior executives who make up the corporate steering committee and the senior quality-management team. They developed a guide that includes: 1. Product- and service-quality measures 2. Guest satisfaction 3. Market growth and development 4. Organizational indicators, profits, and competitive status This case demonstrates how using all available resources an organization can design a plan of action for position their brand and developing a competitive advantage difficult to copy. Forbes Contributor Carmine Gallo explains what the Ritz-Carlton and Apple stores have in common. Solution: Escaping the gap To escape falling into an action gap, the entirety of the innovation process must be adequately designed. The following steps form the basis of creating an effective one, and prevent being afflicted by this gap: Give your company a clear vision To foster innovation, goals should be codified and quantified. To learn more about setting goals check the relevant page. It’s important for managers to keep in mind that defining a goal is just as important as sharing it. Managers must be sure the goals are shared, common, and aligned with the different personal aims throughout the company. See Growth goals Create a defined and rigorous innovation process The innovation process should be explicit, regulated and customized. See Innovation process Set up a mechanism to source new ideas In order to have a shot at ventures at or beyond the current fringes of its industry, a company must source new ideas both internally and externally. See ''Ideas'' Measure the success of your innovation projects Once a company has identified what it considers 'success', the factors must be quantified in order to properly manage your projects. Furthermore companies must be failure-tolerant and provide soft incentives to stimulate innovation attemps. References Anthony D., Scott, and David S. Duncan. Building a growth factory. Boston: Harvard Business Review Press, 2012. Print. Lafley, A. G., and Roger L. Martin. Playing to win: how strategy really works. Boston, Mass.: Harvard Business Review Press, 2013. Print. Mourdoukoutas, P. (2013, September 27). A Strategic Mistake That Haunts JC Penney. Forbes. Retrieved November 8, 2013, from http://www.forbes.com/sites/panosmourdoukoutas/2013/09/27/a-strategic-mistake-that-haunts-j-cpenney/ Turner, S. E. (2008). The New Gold Standard: 5 Leadership Principles for Creating a Legendary Customer Experience Courtesy of the Ritz-Carlton Hotel Company. Library Journal, 133(12), 90 Category:INNOVATION GAPS